Review Ch. 4

Review Ch. 4 - Ch 4 Review 1 Coheed Corp had equity of...

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Ch. 4 Review 1. Coheed Corp. had equity of $135,000 at the beginning of the year. At the end of the year, the company had total assets of $250,000. During the year the company sold no new equity. Net income for the year was $19,000 and dividends were $2,500. What is the sustainable growth rate? 2. Calculate the internal growth rate for the company in the previous problem. What is the growth rate? 3. The most recent financial statements for Moose Tours, Inc. follow. Sales for 2009 are projected to grow by 20%. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20% growth rate in sales? Income Statement Sales $929,000 Costs 723,000 Other expenses 19,000 EBIT 187,000 Interest 14,000 Taxable income 173,000 Taxes 60,550 Net income
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This note was uploaded on 11/21/2011 for the course BMGT 340 taught by Professor White during the Fall '08 term at Maryland.

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Review Ch. 4 - Ch 4 Review 1 Coheed Corp had equity of...

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